How should you trade in gold and silver ahead of US Fed meet outcome? Explained

The two-day policy meeting of the US Federal Reserve commences later today, December 9, and concludes on Wednesday, December, with a decision on interest rates and a speech by Chair Jerome Powell set for Wednesday. The outcome is anticipated to provide insights into the central bank's position as it approaches 2026.

According to analysts, gold and silver saw slight profit-taking as traders waited for the FOMC meeting, and investor sentiment dimmed following news that the US Producer Price Index (PPI) data for October and November, which was supposed to be released this week, will now be published in January, creating uncertainty regarding inflation and the Fed's forthcoming actions.

According to reports, markets largely anticipate a 25 basis-point reduction in rates by the Fed during the December meeting. This expectation has contributed to a recent rise in gold prices.

Meanwhile, some traders are concerned the Fed might implement a “dovish cut but hawkish tone”—meaning they could execute a rate reduction while indicating that future cuts may be limited.

Experts believe such a mixed result could restrain gains (or even exert downward pressure on prices). Additionally, volatility in currencies (notably the US dollar), global economic indicators, industrial demand (particularly for silver), and overall risk sentiment also influence the situation.

MCX gold has gained sharply, with year-to-date returns reaching 70%, while MCX silver has shown even more eye-popping performance, with a massive surge of 110%% in 2025 so far.

“With the US Federal Reserve meeting coming up, many traders are anticipating a rate cut or at least a dovish tone. Domestically, the recent weakness of the rupee adds support to MCX gold price. Regardless of decision, expect swings — because gold reacts not just to the decision but to the tone, economic projections, and global currency/dollar moves,” said Jigar Trivedi, Senior Research Analyst at Reliance Securities.

Trading strategy ahead of the meeting

Nirpendra Yadav, Sr. Commodity Research Analyst at Bonanza, advised buy dips in gold or silver in the days before the meeting — with stop-loss — to catch a potential rally if rate cut and dovish tone comes. The expectation seems already priced in, but a “buy on dip” may still work.

"Also, commodity futures option can be used to take a more leveraged view and to limit the risk during uncertain price movements" added Yadav.

Gold Price Strategy

Gold remains in a strong primary uptrend on the weekly timeframe, with price continuing to hold above its rising 20-week and 50-week moving averages, believes analysts. Meanwhile, experts witness Silver to be trading near all-time highs after a sharp rally. The weekly price action shows steep, persistent upside momentum — higher highs and higher lows on the weekly timeframe. Breakouts from prior consolidation have accelerated the trend.

“In MCX, trend is likely to remain upside. Gold has support at 124,000 and resistance at 136,000, while silver has support at 175,000 and resistance at 186,000m” said Nirpendra Yadav.

According to Trivedi, comex gold price has support at $4,100 and resistance at $4,300 level. Support for silver price is seen at $55, and resistance is placed at $59 level.

Trivedi recommends selling MCX gold for February expiry on bounce at around ₹1,30,000 level, for a target price of ₹1,29,000 per 10 grams, while maintaining a stop loss at ₹1,30,300 level.

He also has a ‘Sell’ call on MCX silver for March expiry. He recommends selling MCX silver on bounce at ₹1,82,000 level for a target price of ₹1,81,000 per kg, and keeping a stop loss at ₹1,82,500 level.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.